Looking back on 2015, there have been a lot of things going on with respect to the energy business and how it affects different industry sectors, as well certain areas like my home state of Texas! Natural gas prices lumbered at historical lows and with oil prices still on a downward spiral since June 2014, into the $36.00 range, some analysts predict that prices could fall below $30.00. Consumers have been able to benefit from the price drop at the pump, while some oil companies have started to feel the heat from declining oil prices.

In Texas, construction is finishing the year off strong, especially in the DFW area, where we continue to see a significant rise in construction and job creation. Houston, although not able to keep up the pace it had for the last few years, still has cranes in the air and new developments are coming online. Driving around the DFW area, cranes have been popping up all over town due to the construction of corporate relocations, office buildings, multifamily buildings, mixed use, and manufacturing additions. This has been a great sign for DFW! The construction companies and developers are enjoying some good times that can hopefully last another two to three years.

While these construction companies and large building owners continue to build, their power needs become great and more complex. Getting power for projects is not just a cost of doing business; it really is a way to more effectively managing the project by planning ahead of time. My firm, Servant Energy Partners, truly believes that by involving power needs at the beginning of the construction process a company can save large amounts of time and costs, plus add savings to the bottom line. Our firm takes the approach that every project is unique. Finding out time frames, challenges, and the load can help a company put a road map plan in place, ensuring that power is ready and available when needed for the project. Additionally, ensuring that there is a long term process in place to handle the power needs for the duration of the project, all the way through transition to the ownership group.

Servant Energy Partners, which includes a team of skilled former utility personnel, helps our construction, developer, and building owner’s partners through the process, so they will have peace of mind when they start a project and ensure that they will be prepared to handle any challenges and obstacles that may arise. All while saving money on the power they use. We have been fortunate to be a part of some of the largest projects in the DFW area in 2015, including State Farm (Austin Commercial), Raytheon Headquarters (A & P), Parkland Hospital (BARA), and Liberty Mutual (Balfour Beatty). What a blessing and a pleasure it has been to be involved in these projects.

Our goal, at Servant Energy Partners, has always been to serve our clients and help them save on the energy. As our 2015 journey is coming to an end, we want to thank all of our partners who have help make our 5th year in business a year of exciting growth and rewards, both personally and professionally. We hope that you will allow us to help you on your journey, as your energy partner in the coming years. “Power Up for 2016” and Beyond!

Homeowners could save money and help the state’s power grid maintain its integrity during the hottest summer days under a new pilot program offered by the Electric Reliability Council of Texas.
The ERCOT board approved the program last week as a way to reduce electricity demand in the late afternoons during the summer months. The grid operator has warned that electricity could be in tight supply and there’s a significant chance that alerts could be issued.
To participate, residential customers should contact their retail electric provider or Oncor.
Homeowners will be pooled with other customers with the goal of cutting 100 kilowatts of electricity usage during a targeted 30-minute period.
Robbie Searcy, communications manager for ERCOT, explained it would take about 65 to 70 homes raising the thermostat and halting the use of appliances to make up the necessary 100 kilowatts.
Homes make up about 51 percent of ERCOT’s power consumption during peak periods.
“This really opens it up to a different type of consumer,” Searcy said. “We hope to see increased participation in residential consumers.”
Paul Wattles, senior analyst for ERCOT, said in most cases homes need special equipment on the thermostat or air conditioner so they can be controlled remotely. When it’s needed, the electricity demand can be reduced by the entity the homeowner signed up with. Then, the customer is compensated for reducing the load during the peak time.
“Whatever you give us, whenever we call you, we’re going to pay you for that,” Wattles said.
The pilot program is separate from the commercial incentive program where ERCOT pays big industrial users to cut back when the gap between load and demand shrinks. The businesses get paid for reducing their electricity usage during that period. The new pilot program runs from June to September and is weather and load related so it goes into effect when it’s most needed.
To explain the program, she used the following example:
It’s a hot summer morning with high temperatures expected to reach 105 to 115 degrees in the ERCOT service area.
Generators are working at full capacity but ERCOT keeps an eye on the margin between generation and load.
If the gap reaches 2,300 megawatts, an Energy Emergency Alert goes out, asking consumers to voluntarily cut back usage from 3 p.m. to 7 p.m.
Consumers who are participating in the pilot program will be asked to cut back usage mostly by raising the thermostat and not using big appliances.
ERCOT will distribute money to the company that aggregated the consumers in the pilot program, in some cases a retail electric provider.
The company will return those savings to consumers based on how much power they saved.
ERCOT expects to pay out between $34,000 to $86,000.
The staff report for the pilot program shows the potential the program has for the state this summer and in the future.
“If the pilot demonstrates that participating loads can provide meaningful demand response during peak summer conditions at a reasonable price, the potential long-term reliability benefits could be substantial, given the best demand response potential associated with residential loads at summer peak.”

There will be high demands made on the grid by the hot weather and there are things everyone can do to help conserve power during peak hours. The following are just a few small steps we can make a difference:

1. Turn of all unnecessary lights, appliances, and electronic equipment
2. When at home, close blinds and drapes that get direct sunlight, set air-conditioning thermostats to 78 degrees or higher and use fans
3. When leaving the home set air condition thermostats to 85 degrees and turn off all fans. Block the sun by closing blinds or drapes with direct sunlight.
4. Do not use dishwasher, laundry equipment, hair dryers, coffee makers, or other home appliances during the peak hours of 3 to 7pm.
5. Avoid opening refrigerators or freezers than necessary.
6. Use microwaves for cooking instead of electric range or ovens.
7. Set your pool pump to run in the early morning or evening instead of the afternoon.

We can all do our part to conserve on energy, lessen the demand on power, and insure that the rolling power blackouts we’ve had in the past are a thing of the past. Please email rduron@servantenergy.com if you need power for you facility or need an energy partner for your firm. Here to Serve!

Most Americans aren’t doing enough to stop their homes from being energy hogs.
People have to do more — at least four energy efficiency improvements — to make a real impact on their utility bills. Unfortunately, Americans aren’t reaching that magic number, even though the government and utilities have spent hundreds of millions of dollars to get them to act.”
Most energy conserving behaviors and home improvement activities dropped significantly from last year” and now are more in line with percentages from 2008 and 2009.
Researchers looked at more than a dozen improvements and behavior changes from simply turning off lights and using less energy during peak periods to having a home energy audit. Activity fell in each category this year with respondents doing a mere 2.6 things on average to reduce energy consumption — which was not enough to lower electricity bills.
Oddly, the drop in energy-saving improvements and activity occurred even though Americans seem to be somewhat more aware that their homes need work and that their energy costs are increasing. This year, 23 percent said their homes were inefficient compared to 14 percent in 2010.
There is a reason there is a gap between perception and behavior:
• Denial. “Most Americans continue to live in denial about their energy consumption,” the report said. Despite doing less to save energy, 71 percent of respondents said they believe they are using the same amount or less energy than they did five years ago. Twenty-six percent said they were using more, and 3 percent said they didn’t know.
• A high-tolerance for bill increases. Fifty-eight percent said their utility bill would have to increase by more than $75 a month before they’d consider spending money on energy improvements. On average, respondents said it would take an increase of $112 to spur them to action and those is not a certainty give variables that can affect a bill.
• Costs. The people who most need to make energy efficient improvements are the least able to make them. Those who can better afford to spend money on home improvements were more sensitive to bill increases” and were more likely to make changes that would reduce costs. That is usually the ones that are acting.
• Misplaced priorities. “Consumers continue to prioritize the wrong things as you can see from the lack of home energy audits. Home energy audits continue to be the colonoscopy of energy efficiency. Everyone should get one, but too few actually go through with it. This year, 15 percent said they had an energy audit done on their home, compared to 20 percent last year. Only a third said they think an audit is necessary and of those people close to half said they might get one done.
The federal government should take the hundreds of millions of dollars that’s currently fragmented into best-practices tests, block grants and pilot programs all over the country and pool the money into one big pot. Then design a big national education effort to encourage Americans to take the most important four or five steps necessary to see a real reduction in their utility bills. There needs to be incentive that both creates people to act as well as results that they can look forward to.

And don’t expect to get any more reliability for your money. In fact, next year, the lights seem more likely to go out.

The problem is, power companies aren’t building many more generating plants. Some companies are shutting down plants that are old or don’t comply with new pollution rules. At the same time, Texans are using more electricity than ever. In the Texas deregulated market, when supply declines and demand rises, prices go higher. That could put Texas electricity consumers on a free-market roller coaster. “I think there may be some pressure for prices to rise,” said Phil Tonge, president of electricity retailer Spark Energy. “I’m knocking on wood right now. I’m hoping we don’t see another summer like we did this past summer.”

During the past few years, natural gas prices have been low and steady. Since natural gas prices tend to set the price of power in Texas, wholesale power prices have also declined. That’s good for consumers, right? Maybe not for long. Low prices have deterred some power companies from building new plants. Tight electricity supply could soon turn power prices higher.

The Electric Reliability Council of Texas, which operates the state grid, predicts demand for power will increase steadily for the next decade as population increases. The council’s predictions can be conservative. This year, we used much more electricity than expected, thanks largely to February’s freeze and August’s record inferno.

Power plants
At the same time, the supply of new power generation isn’t keeping pace with demand growth. Between 2000 and 2002, when natural gas was cheap, power companies built more than 100 natural gas-fired generators within the Texas grid. Then, as natural gas prices rose to record levels, driving wholesale electricity prices higher, power generators built dozens of wind and coal-fired plants. Wind and coal plants are cheaper to run than natural gas plants, and therefore earn a fatter profit margin when natural gas prices push wholesale power prices higher.

But when natural gas prices collapsed a few years ago, power-plant building hit the skids.

Consider how things shaped up for the plants that were scheduled to go online next year. Back in 2007, plant operators had the permits and grid-connection agreements to add 4,221 megawatts of capacity in 2012. The following year, the planned capacity for 2012 rose to 5,987 megawatts. Now, generation companies plan to add 1,940 megawatts of capacity next year, less than half of what they originally intended. Also, the state’s largest power generator, Energy Future Holdings, announced it will stop operating two coal-fired plants in order to comply with stiffer pollution regulations. That would wipe out 1,200 megawatts of capacity on Jan. 1.

Without those power plants during the August electricity emergencies, the lights would have gone out, ERCOT executives have said. ERCOT chief executive Tripp Doggett predicts the loss of power generation due to new Environmental Protection Agency rules could boost customer electric bills by around 10 percent.

Price signals
In theory, when generating company leaders see higher prices, they build more plants. But some experts say prices aren’t going high enough in Texas to persuade power-generation companies to break ground. So long as natural gas prices are low, investors worry any rise in wholesale power prices is temporary. “Fundamentally, we’re trying to establish the right price signals to get the investment we need when we need it, to keep the lights on,” said Dan Jones, ERCOT’s independent market monitor. He thinks prices should be allowed to go higher.

In the land of electricity deregulation, ratepayers no longer pay a monopoly company to build power plants. Instead, competing power generators build plants on their own dimes and make money by selling the electricity into the market. Each day, power generators bid their electricity into the market. ERCOT tells power plants to fire up to meet demand, calling on the cheapest bids first.

Some old, inefficient natural gas plants cost a lot to operate and may get called on to do so only when demand is tight and market prices jump very high. For those plants to make enough money to stay in business, they need to get called on to operate a few times a year at extremely high prices.

Currently, wholesale prices are capped at $3,000 per megawatt-hour. (The average Texas family uses about one megawatt-hour of power each month.) That cap is far, far higher than the usual market price of around $20 to $50 per megawatt-hour. Jones, the ERCOT market monitor, proposed boosting the cap to $6,000 per megawatt-hour, but only when ERCOT declares a grid emergency.

Trickling down
Higher wholesale prices have a way of trickling down to consumers. Anyone who signed up for a variable-rate plan, in which rates can change each month, probably saw much higher rates after this year’s grid emergencies. Even people on fixed-rate contracts could see higher prices when their contracts come due. That’s because if wholesale prices are higher, it costs retail electric providers more to buy the power. And if wholesale prices are more volatile, retailers have to pay more to protect themselves from price swings.

Retailers often buy electricity ahead of time to keep costs predictable, or they invest in market securities that hedge against price swings. “Almost anyone who’s a retailer in Texas, if they don’t have any generation, is going to have to take significant steps to protect themselves against the high peaks,” said NRG Energy chief executive David Crane. NRG executives have said they expect to spend more money next year to protect their retail companies against price swings, and such costs will surely fall to customers across the industry.

10 Ways to Conserve Energy
Tips to Help You Save!
1. Replace old light bulbs with energy saving fluorescent bulbs. They may cost more, but will save you much more in the long run.

2. Turn off all electronic devices that are not in use. Not only turn them off but try to remember to unplug them. You will be surprised how much you will save with this simple step!

3. Air dry your dishes. When washing in a dish washer, the heat generated during the wash cycle is more than enough to dry your dishes.

4. Clean or replace air filters regularly. This can vary depending on the filter you are using. It’s important to follow the instruction found on the packaging. If you no longer have it, here are some basic guidelines:

Deep Pleated = Once or twice a year

Ordinary Flat or Pleated = 2-3 Months

Traditional Fiberglass/Polyester = Monthly

It is also important that your air filter fits properly and air is moving through it and not around it.

5. Close vents and doors in unused rooms. No need to cool or warm areas that people are not in.

6. Weather strip doors and windows! Weather stripping is an inexpensive alternative to replacing windows and will save you hundreds of dollars!

7. Wash clothes in cold water. Believe it or not cold water does clean, and many laundry soap manufacturers now offer soaps specifically made for washing clothes in cold water.

8. Repair or replace leaky faucets. A leaky faucet waste upwards of 30,000 gallons of water a year. Thats right, imagine what you would be saving with a quick fix!

9. Wash clothes in the morning or evening when its cooler. Sounds silly but the heat generated by the dryer will warm the house and in the summer months your air conditioner will use more energy to cool your home.

10. When shopping for new appliances invest in Energy Star. Energy Star appliances are not by any means cheap, but the upfront cost will pay for it self ten fold in the amount of energy you will be saving over time.

As companies increasingly turn their attention to the environmental impact of doing business, they are learning that sustainable practices help reduce costs and increase efficiency. An effective sustainability plan not only assesses how to reduce carbon emissions, conserve water and minimize waste to landfills, but also fosters employee investment in a “go green” culture and lifestyle at home.

One area where many companies are directly reducing their environmental impact is through the management of their supply chain. Working with their suppliers, companies can reduce excess packaging and waste by insisting products be shipped in multi-packs or reusable containers. For example, Lockheed Martin has achieved cost savings through a new program with Staples by purchasing green products, including recycled paper, which has saved nearly 9,000 trees in one year alone.

Some companies are creating a “go green” culture by taking steps to achieve the U.S. Green Building Council’s Leadership in Energy and Environmental Design (LEED) certification, purchasing renewable energy credits and setting up “green zones,” where employees commit to reducing their energy use. LEED certified buildings help reduce energy costs and efficiency and reinforce a company’s commitment to sustainability.

Supporting environmental education programs and initiatives of environmental organizations helps employees to get involved in environmental initiatives outside of the company and learn more about how they can support sustainability efforts. Lockheed Martin supports environmental education as part of its overall science, technology, engineering and math outreach efforts. Its engineers lead classroom events using environmental science lesson plans and the company sponsors National Environmental Education Week that precedes Earth Day.

Dr. David Constable, corporate vice president of energy, environment, safety and health for Lockheed Martin, suggests that companies consider the following when developing sustainable business processes:

1. Set ambitious but reasonable goals to reduce environmental impacts
Identify areas where the company can reduce carbon emissions, conserve water and reduce waste through recycling. These initiatives often result in significant cost savings for companies that execute them properly.

2. Develop employee programs and incentives to encourage participation in sustainability initiatives
Offer employees who make an ENERGY STAR pledge a worthwhile incentive. Disseminate information about how they can reduce energy use at home and in the office.

3. Consolidate data servers and IT operations where possible
Reducing the number of data servers ultimately lowers electricity use, frees up office space and results in significant cost savings.

4. Identify projects that will help to reduce the use of natural resources and disposal of waste to landfills
Implementing a comprehensive recycling program is a simple, cost-efficient way to reduce waste going to the landfill.

Effective corporate sustainability practices equal responsible business practices. Minimizing carbon emissions, reducing waste to landfill and conserving water are not only environmental imperatives but essential to reducing costs and maximizing efficiency.